Recyclers May Share in $700M River Cleanup

CHICAGO (CN) – A paper mill’s early knowledge that its paper contained a toxic chemical is but one factor relevant to liability for the $700 million cleanup of Wisconsin’s Lower Fox River, the 7th Circuit ruled. One of two opinions that the federal appeals court released on the case Thursday opens by noting that NCR Corp.’s invention of carbonless copy paper “in the mid-1950s solved a small problem and created a large one.” “Though it alleviated the messy side effects of carbon paper for those who wanted copies in the pre-photocopy era, over the next quarter-century it became clear that the cost of this convenience was large-scale environmental contamination,” Chief Judge Diane Wood wrote for a three-judge panel. Until the early 1970s, NCR coated its carbonless copy paper with a highly toxic pollutant, Aroclor 1242, a polycholorinated biphenyl (PCB). The Lower Fox River in Wisconsin, home to NCR’s paper plant, accumulated large quantities of the chemical from dumped wastewater, and recyclers of NCR’s paper added more PCBs to the river by washing off the harmful chemicals and making the pulp into new paper. Estimates found that NCR was responsible for approximately 39 percent of the PCBs that entered the river, while 61 percent entered as a result of recycling operations. The Lower Fox River begins at the outlet of Lake Winnebago and travels for 39 miles before spilling into Green Bay. Major cleanup efforts that took shape in 1998 are estimated to cost more than $700 million. A federal judge previously ruled that NCR should have to bear 100 percent of costs, even though recyclers collectively dumped more of the pollutant, because it was the first to become aware of PCB’s environmental toxicity – and then increased its use of the chemical. But the 7th Circuit ruled Thursday that the recycling mills may have to bear some of the cost of cleaning up the river. “In the District Court’s view, the record left no doubt that NCR knew long before others that PCBs posed a long-term risk to the environment,” Wood wrote. “The importance of this early knowledge, it thought, drowned out all other equitable factors. It added that NCR actually increased its production of PCB-laden carbonless copy paper even as its knowledge of the risks increased in the late 1960s, and NCR’s response to the evidence was sluggish at best.” Knowledge of the paper’s toxicity should be the determining factor as to who should be responsible for the cleanup, according to the 57-page ruling. “The problem is that the court’s reasons for rejecting consideration of other factors leave us unable to say whether the record adequately supported the court’s decision to select knowledge as the decisive factor,” Wood said. She noted that relative volumes dumped or cooperation with the Environmental Protection Agency may be relevant to an equitable determination. In a separate opinion, the same panel said that the EPA was not required to amend its record of decision when its cost estimate spiked 62 percent because it never changed the fundamental plan for cleaning the river, mainly dredging with some use of capping. Judge John Tinder signed the second opinion. In vacating a permanent injunction that the District Court had imposed on NCR for fighting the EPA on the agency’s clean-up plan, the 7th Circuit deemed such relief “an inappropriate mechanism to enforce an administrative order.” An injunction in this situation should only be issued in an emergency situation necessary to protect public health and the environment, the panel said. In addition, “the entry of an injunction that simply orders PRPs [potentially responsible parties] to comply with a complex cleanup order issued by EPA may run afoul of Federal Rule of Civil Procedure 65(d)(1)(C), which requires that every injunction ‘describe in reasonable detail – and not by referring to the complaint or other document – the act or acts restrained or required,'” Tinder wrote. “Accordingly, permanent injunctive relief is incongruous with the nature and purpose of an action to enforce an administrative cleanup order.”